Foreign investors may be inclined to view Dubai and Abu Dhabi as a package deal, two halves of a whole. It's understandable; these emirates are the principal members of the UAE federation, and benchmark stock indices popular overseas, such as MSCI Barra UAE, lump together stocks listed on the two bourses.
That may seem like no big thing. The ADX General Index in Abu Dhabi had a 16.1 per cent gain this year as of December 17; the corresponding figure for the Dubai Financial Market General Index was 14.8 per cent.
Abu Dhabi also holds a minute performance edge over the last five years. That period corresponds roughly to the expansion and contraction of the Dubai property bubble, a tumultuous development that created much greater volatility for Dubai shares along with slightly worse returns.
The Abu Dhabi stock market may maintain its advantage, and even build on it, in the months to come, if not for longer.
As events during the last few weeks make clear, there is no imminent resolution to the problems besetting Dubai. Even after one is reached - a deal is made with creditors, real estate prices stabilise - investors may find that the crisis left a more persistent and damaging legacy than they had anticipated.
A fact of economic life in the UAE is that Dubai owes money, and Abu Dhabi has it.
The announcement in late November that Dubai World, a commercial enterprise owned by the emirate's government, wanted to delay debt payments for six months should have been a reminder of that key distinction. Instead, there was indiscriminate selling.
The ADX and DFM each fell about 12 per cent in two trading days as sellers evidently adopted the package-deal theory and acted accordingly.
I made the case here two weeks ago that Abu Dhabi shares had seemed especially hard done by. Traders apparently reached the same conclusion, as the DFM kept falling and the ADX began to recoup its losses.
Dubai shares began catching up after the announcement on December 14 that Abu Dhabi would come to its neighbour's rescue to the tune of US$10 billion (Dh36.7bn). It may be tempting to conclude from that latest act of largesse that the glitzier emirate is close to turning a corner and heading in the right direction toward financial soundness.
There are good reasons to avoid investing heavily in Dubai based on that idea, however.
For one, it may not happen. It didn't earlier in the year when the consensus was that the first round of assistance, also $10bn, would do the trick.
There is unlikely to be an event that announces that Dubai's debt problems are firmly in the past or that is taken that way by the global investment community. Abu Dhabi has shown that it won't write a blank cheque, and given the reputation of bondholders, as opposed to banks, for prickliness and obstinacy, no single big deal with creditors can be expected.
More important for the long haul, once the crisis is resolved - however and whenever - Dubai's access to global credit markets could be curtailed.
Much criticism has been directed at the emirate for its handling of Dubai World's troubles, and future requests for credit are expected to be greeted with great circumspection.
"Their ability to raise money internationally has been tarnished," said Joe Kawkabani, managing director for asset management at Algebra Capital. "In the future it's going to make them be 100 times more transparent, but the cost of funding will be much higher."
For an economy like Dubai's that was built on leverage and easy access to credit, and whose key industries - property, finance and construction - depend on a continuous supply of capital, that almost ensures years of so-so growth.
That is likely to mean softer profits and weaker returns for stocks, especially if companies used to raising money through the debt markets have to issue equity instead, creating a surfeit of supply and depressing valuations.
Abu Dhabi, whose economy hinges on a sector, energy, whose outlook is considered stable to strong, is on much firmer footing, and the emirate has earned a reputation for fiscal conservatism.
It must rank near the top of any league table comparing the capital that countries have with what they need.
During the last two turbulent years, investors all over the world have put a premium on markets in countries with sound finances and prudent economic policies.
With global recovery still far from assured and doubts hanging over economies and companies that rely on extensive use of credit to achieve growth, that trend is likely to hold, including in the UAE.
Conrad de Aenlle is a freelance investment and personal finance writer based in the US
The specs
Engine: 2.0-litre 4-cyl, 48V hybrid
Transmission: eight-speed automatic
Power: 325bhp
Torque: 450Nm
Price: Dh359,000
On sale: now
TOP 5 DRIVERS 2019
1 Lewis Hamilton, Mercedes, 10 wins 387 points
2 Valtteri Bottas, Mercedes, 4 wins, 314 points
3 Max Verstappen, Red Bull, 3 wins, 260 points
4 Charles Leclerc, Ferrari, 2 wins, 249 points
5 Sebastian Vettel, Ferrari, 1 win, 230 points
Killing of Qassem Suleimani
Apple%20Mac%20through%20the%20years
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Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
Schedule:
Sept 15: Bangladesh v Sri Lanka (Dubai)
Sept 16: Pakistan v Qualifier (Dubai)
Sept 17: Sri Lanka v Afghanistan (Abu Dhabi)
Sept 18: India v Qualifier (Dubai)
Sept 19: India v Pakistan (Dubai)
Sept 20: Bangladesh v Afghanistan (Abu Dhabi) Super Four
Sept 21: Group A Winner v Group B Runner-up (Dubai)
Sept 21: Group B Winner v Group A Runner-up (Abu Dhabi)
Sept 23: Group A Winner v Group A Runner-up (Dubai)
Sept 23: Group B Winner v Group B Runner-up (Abu Dhabi)
Sept 25: Group A Winner v Group B Winner (Dubai)
Sept 26: Group A Runner-up v Group B Runner-up (Abu Dhabi)
Sept 28: Final (Dubai)
The finalists
Player of the Century, 2001-2020: Cristiano Ronaldo (Juventus), Lionel Messi (Barcelona), Mohamed Salah (Liverpool), Ronaldinho
Coach of the Century, 2001-2020: Pep Guardiola (Manchester City), Jose Mourinho (Tottenham Hotspur), Zinedine Zidane (Real Madrid), Sir Alex Ferguson
Club of the Century, 2001-2020: Al Ahly (Egypt), Bayern Munich (Germany), Barcelona (Spain), Real Madrid (Spain)
Player of the Year: Cristiano Ronaldo, Lionel Messi, Robert Lewandowski (Bayern Munich)
Club of the Year: Bayern Munich, Liverpool, Real Madrid
Coach of the Year: Gian Piero Gasperini (Atalanta), Hans-Dieter Flick (Bayern Munich), Jurgen Klopp (Liverpool)
Agent of the Century, 2001-2020: Giovanni Branchini, Jorge Mendes, Mino Raiola
Stree
Producer: Maddock Films, Jio Movies
Director: Amar Kaushik
Cast: Rajkummar Rao, Shraddha Kapoor, Pankaj Tripathi, Aparshakti Khurana, Abhishek Banerjee
Rating: 3.5
More from Rashmee Roshan Lall
more from Janine di Giovanni
House-hunting
Top 10 locations for inquiries from US house hunters, according to Rightmove
- Edinburgh, Scotland
- Westminster, London
- Camden, London
- Glasgow, Scotland
- Islington, London
- Kensington and Chelsea, London
- Highlands, Scotland
- Argyll and Bute, Scotland
- Fife, Scotland
- Tower Hamlets, London
Top 5 concerns globally:
1. Unemployment
2. Spread of infectious diseases
3. Fiscal crises
4. Cyber attacks
5. Profound social instability
Top 5 concerns in the Mena region
1. Energy price shock
2. Fiscal crises
3. Spread of infectious diseases
4. Unmanageable inflation
5. Cyber attacks
Source: World Economic Foundation
Soldier F
“I was in complete disgust at the fact that only one person was to be charged for Bloody Sunday.
“Somebody later said to me, 'you just watch - they'll drop the charge against him'. And sure enough, the charges against Soldier F would go on to be dropped.
“It's pretty hard to think that 50 years on, the State is still covering up for what happened on Bloody Sunday.”
Jimmy Duddy, nephew of John Johnson
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
MATCH INFO
Azerbaijan 0
Wales 2 (Moore 10', Wilson 34')
UAE currency: the story behind the money in your pockets
The Bio
Hometown: Bogota, Colombia
Favourite place to relax in UAE: the desert around Al Mleiha in Sharjah or the eastern mangroves in Abu Dhabi
The one book everyone should read: 100 Years of Solitude by Gabriel Garcia Marquez. It will make your mind fly
Favourite documentary: Chasing Coral by Jeff Orlowski. It's a good reality check about one of the most valued ecosystems for humanity
COMPANY%20PROFILE
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Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
RESULTS
5pm: Rated Conditions (PA) Dh85,000 (Turf) 1,600m
Winner: AF Mouthirah, Tadhg O’Shea (jockey), Ernst Oertel (trainer)
5.30pm: Maiden (PA) Dh80,000 (T) 1,400m
Winner: AF Alajaj, Tadhg O’Shea, Ernst Oertel
6pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 1,400m
Winner: Hawafez, Connor Beasley, Abubakar Daud
6.30pm: Maiden (PA) Dh80,000 (T) 2,200m
Winner: Tair, Fabrice Veron, Eric Lemartinel
7pm: Handicap (PA) Dh80,000 (T) 2,200m
Winner: Wakeel W’Rsan, Richard Mullen, Jaci Wickham
7.30pm: Handicap (PA) Dh100,000 (T) 2,400m
Winner: Son Of Normandy, Fernando Jara, Ahmad bin Harmash
Diriyah%20project%20at%20a%20glance
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Six large-scale objects on show
- Concrete wall and windows from the now demolished Robin Hood Gardens housing estate in Poplar
- The 17th Century Agra Colonnade, from the bathhouse of the fort of Agra in India
- A stagecloth for The Ballet Russes that is 10m high – the largest Picasso in the world
- Frank Lloyd Wright’s 1930s Kaufmann Office
- A full-scale Frankfurt Kitchen designed by Margarete Schütte-Lihotzky, which transformed kitchen design in the 20th century
- Torrijos Palace dome
Tomb%20Raider%20I%E2%80%93III%20Remastered
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FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
Mohammed bin Zayed Majlis
The%20specs
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Who are the Sacklers?
The Sackler family is a transatlantic dynasty that owns Purdue Pharma, which manufactures and markets OxyContin, one of the drugs at the centre of America's opioids crisis. The family is well known for their generous philanthropy towards the world's top cultural institutions, including Guggenheim Museum, the National Portrait Gallery, Tate in Britain, Yale University and the Serpentine Gallery, to name a few. Two branches of the family control Purdue Pharma.
Isaac Sackler and Sophie Greenberg were Jewish immigrants who arrived in New York before the First World War. They had three sons. The first, Arthur, died before OxyContin was invented. The second, Mortimer, who died aged 93 in 2010, was a former chief executive of Purdue Pharma. The third, Raymond, died aged 97 in 2017 and was also a former chief executive of Purdue Pharma.
It was Arthur, a psychiatrist and pharmaceutical marketeer, who started the family business dynasty. He and his brothers bought a small company called Purdue Frederick; among their first products were laxatives and prescription earwax remover.
Arthur's branch of the family has not been involved in Purdue for many years and his daughter, Elizabeth, has spoken out against it, saying the company's role in America's drugs crisis is "morally abhorrent".
The lawsuits that were brought by the attorneys general of New York and Massachussetts named eight Sacklers. This includes Kathe, Mortimer, Richard, Jonathan and Ilene Sackler Lefcourt, who are all the children of either Mortimer or Raymond. Then there's Theresa Sackler, who is Mortimer senior's widow; Beverly, Raymond's widow; and David Sackler, Raymond's grandson.
Members of the Sackler family are rarely seen in public.
Killing of Qassem Suleimani
'Lost in Space'
Creators: Matt Sazama, Burk Sharpless, Irwin Allen
Stars: Molly Parker, Toby Stephens, Maxwell Jenkins
Rating: 4/5
Killing of Qassem Suleimani
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The%20Specs%20
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MATCH INFO
Uefa Champions League, Group B
Barcelona v Inter Milan
Camp Nou, Barcelona
Wednesday, 11pm (UAE)
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
